Islandsbanki hf


As Agent Bank, please be advised of the following rate determined on:30-Nov-2006

Issue               : Islandsbanki hf - Series 186
                      USD 75,000,000 Step UP Callable FRN due 2 Mar 2015
ISIN Number         : XS0213269094
Common Code/
144A ISIN           : 21326909
Issue Nomin     USD : 75,000,000.00
Period              : 04-Dec-2006 to 02-Mar-2007      Payment Date 02-Mar-2007
Number of Days      : 88
Rate                : 5.77
Denomination    US  : 1,000.00      75,000,000.0
Amount Payable
per Denomination    : 14.10        1,057,833.33

JPMorgan Chase Bank
Rate Fix Desk                     Telephone   44(0) 1202 32 6660
Institutional Trust Services      Facsimile   44(0) 1202 34 7939



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